HF 3846

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/15/2024 09:36am

A bill for an act
relating to economic development; modifying the community wealth-building
grant program pilot project; appropriating money; amending Laws 2023, chapter
53, article 15, section 33, subdivisions 4, 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Laws 2023, chapter 53, article 15, section 33, subdivision 4, is amended to
read:

Subd. 4.

Loans to community businesses.

(a) A partner organization that receives a
grant under subdivision 3 shall establish a plan for making low-interest loans to community
businesses. The plan requires approval by the commissioner.

(b) Under the plan:

(1) the state contribution to each loan shall be no less than $50,000 and no more than
$500,000;

(2) loans shall be made for projects that are unlikely to be undertaken unless a loan is
received under the program;

(3) priority shall be given to loans to businesses in the lowest income areas;

(4) the new text begin fee or new text end interest rate on a loan shall not be higher than the Wall Street Journal prime
rate;

(5) 50 percent of all repayments of principal on a loan under the program shall be used
to fund additional new text begin related new text end lending. The partner organization may retain the remainder of
loan repayments to service loans and provide further technical assistance;

(6) the partner organization may charge a loan origination fee of no more than one
percent of the loan value and may retain that origination fee; deleted text begin and
deleted text end

(7) a partner organization may not make a loan to a project in which it has an ownership
interest deleted text begin . deleted text end new text begin ; and
new text end

new text begin (8) the partner organization may forgive up to 15 percent of a loan's principal amount
if the borrower has met all lending criteria, including creating or retaining jobs and being
current with all loan payments, for at least two years.
new text end

Sec. 2.

Laws 2023, chapter 53, article 15, section 33, subdivision 5, is amended to read:

Subd. 5.

Reports.

(a) The partner organization shall submit a report to the commissioner
by deleted text begin January deleted text end new text begin December new text end 31 of 2024, 2025, and 2026. The report shall include:

(1) an account of all loans made through the program the preceding calendar year and
the impact of those loans on community businesses and job creation for targeted groups;

(2) information on the source and amount of money collected and distributed under the
program, its assets and liabilities, and an explanation of administrative expenses; and

(3) an independent audit of grant funds performed in accordance with generally accepted
accounting practices and auditing standards.

(b) By February 15 of deleted text begin 2024, deleted text end 2025, deleted text begin and deleted text end 2026, new text begin and 2027, new text end the commissioner shall submit
a report to the chairs and ranking minority members of the legislative committees with
jurisdiction over workforce and economic development on program outcomes, including
copies of all reports received under paragraph (a).

Sec. 3. new text begin APPROPRIATION.
new text end

new text begin $350,000 in fiscal year 2025 is appropriated from the general fund to the commissioner
of employment and economic development for a grant to the Metropolitan Consortium of
Community Developers for the following activities related to the community wealth-building
grant program pilot project: outreach, engagement, training, education, loan servicing,
reporting, program evaluation, and supplemental technical assistance. This is a onetime
appropriation and is available until June 30, 2026.
new text end